Renewable Energy Boosts Rural Economies

In promoting the vision that farms, ranches and forestlands can meet 25 percent of the nation’s energy needs with renewable energy by 2025, the 25x’25 Alliance has demonstrated that moving to that goal has wide economic benefits for rural America.

The most recent evidence of those benefits is the disclosure that U.S. wind farms now pay $222 million dollars a year to farming families and other rural landowners. According to the data released last week by the American Wind Energy Association (AWEA), more than $156 million dollars is going to landowners in counties with below-average incomes.

The data, which is part of AWEA’s 2015 U.S. Wind Industry Annual Market Report set for release later this month, shows the overwhelming majority of U.S. wind farms today operate in rural areas. Some 70 percent of those rural wind farms are in counties where the median household incomes fall below the U.S. average.

Landowners in six states currently receive more than $10 million dollars a year in lease payments, with Texas ranked number one, followed by Iowa, California, Oklahoma, Illinois and Kansas. Landowners in 26 different states receive more than $1 million dollars each year.

Owners of the land on which wind projects are built receive lease payments ranging from $3,000 to $6,000 per megawatt of installed capacity, as well as payments for power line easements and road rights-of-way. Or they may earn royalties based on the project’s annual revenues. The AWEA analysis found many cases in which in wind-farm lease payments allowed producers to keep their family farms, giving owners the chance to pass their operations on to the next generation.

Wind farms also pay taxes that contribute new revenue to local communities, benefiting schools, county and local services, libraries, hospitals and public safety facilities. AWEA cites as an example Oklahoma where wind farms return more than $1 billion dollars in property taxes to counties and local schools over their lifetime, according to an Oklahoma State Chamber report.

The solar industry offers similar benefits to rural areas, pumping more than $15 billion a year into the U.S. economy while building an estimated 20 gigawatts (GW) of installed solar to date (another 20 GW is in the pipeline for this year alone).

An example of the solar industry’s economic impact in rural America is the finding by the North Carolina Sustainable Energy Association that landowners in that state are leasing sites for solar farms for $300 to $700 an acre per year, three times the average rent for cropland and pastureland. As with the economic benefits offered by the wind sector, the solar leases offer farm families a chance to keep their land and pass it on to future generations.

Meanwhile, as a recent analysis from the Renewable Fuels Association (RFA) points out, the ethanol industry continues to make a significant contribution to the agricultural and rural economies. The sector contributed nearly $44 billion to the nation’s gross domestic product in 2015, with close to $24 billion coming from agriculture. The economic activities of the ethanol industry put nearly $24 billion into the pockets of Americans in 2015, including $9.1 billion in rural America.

Job creation is a hallmark of renewable energy development, especially in rural areas. Nearly 414,000 people work in renewable energy, says a study released this week by Environmental Entrepreneurs, a clean energy advocacy group of business executives. The top renewable sectors were solar with 209,000 workers and wind with 77,000 workers. The ethanol sector supported more than 357,400 jobs last year, including 82,000 in agriculture.

In rural communities across the country, wind, solar, biomass, geothermal and hydropower facilities are being built to generate electricity, while creating jobs. Farmers grow corn, soybeans and other crops that provide the feedstocks for biofuels that help power our transportation, while processing plants that produce ethanol, biodiesel and other clean fuels employ thousands. All provide great financial returns to their communities.

The tangible proof of the value of renewable energy to rural America is everywhere and policy makers should insure that the economic benefits that come with clean energy – salaries, tax revenues, leasing payments, commodity profits, among others – are not only sustained, but expanded. We urge lawmakers at the national, state and local levels to examine the data showing the fiscal return offered by renewable energy and sustain the incentives – tax credits, use requirements, grants, guaranteed loans and other mechanisms – that will enable rural America – and the nation ‑ to achieve the viable clean energy economy it deserves.